Backlash on budget pain: Tories hit charities for £1.4billion

Labour rap 'unfair' donations tax cap

Charity case...?: Study says donations will fall by more than £1.4billion due to Mr Osborne's tax raid

GEORGE Osborne's Budget will cost charities at least £1.4billion a year in lost donations, the Sunday Mirror can reveal.

The bombshell emerged as the Chancellor's financial blueprint continued to unravel, prompting Labour's Ed Balls to condemn it last night as one of the "most unpopular, unfair and flawed Budgets in decades".

Mr Osborne plans to cap the tax relief on donations to good causes at £50,000 in the hope of raking in £300million a year for the Treasury.

But charities fear the clampdown will strangle the flow of cash from wealthy backers and companies. Handouts have already plunged because of the economic slump. A study by the National Council of Voluntary Organisations predicts donations will fall by more than £1.4billion due to Mr Osborne's tax raid.

The council has joined forces with five other major charity groups to send the Chancellor a letter urging him to dump the plan.

It warns: "It could be devastating for the many vulnerable people who rely upon our services."

At the moment £11billion is donated every year by individuals and organisations. The charities will also launch a new campaign called "Give it Back George".

John Low, chief executive of the Charities Aid Foundation, said: "These changes risks reducing major donations at a time when charity budgets are being squeezed."

Thomas Hughes-Hallett, chief of Marie Curie Cancer Care, added: "There is shock at every level. There is a feeling that the Government has changed direction on encouraging their own Big Society concept."

Mr Osborne has already come under fire for failing to help motorists, who wanted him to halt a 3p rise in fuel duty, while helping the rich by slashing the 50p top rate of tax to 45p.

Critics have also lashed his "granny tax" which will cut tax relief for the over-65s and his plans to slap VAT on pasties and pies. Last night, Shadow Chancellor Ed Balls said: "This Budget will go down as one of the most unpopular, unfair and flawed Budgets in decades.

"By asking millions to pay more so millionaires can pay less George Osborne has made a terrible choice. The Budget is unravelling day by day and now even Tory MPs are distancing themselves from his mistakes."

Labour MPs will vote against the Budget in the Commons vote tomorrow and have urged Lib Dems to "put their constituents first" and join forces with them.

VAT ON PIES

BAKER Greggs is threatening legal action over George Osborne's plans to slap VAT on its pasties and pies.

The chain saw £30million wiped off its Greggs share price after the Chancellor's taxation call.

At present all hot food has 20 per cent VAT on it. Baked goods escape the tax as they cool down on display. Mr Osborne said this was an "anomaly".

Greggs chief Ken McMeikan said: "This will impact on the consumer at a time they simply cannot afford it.

"We want the Government to accept that this was an ill-thought-through move."

GRANNY TAX

DAME Joan Bakewell is leading the growing backlash against the "granny tax".

She is championing a new e-petition against the Chancellor's plan to freeze a OAP Dame key tax perk for the elderly.

Dame Joan hopes to collect 100,000 names on the Downing Street website, which could trigger a vote in the Commons. George Osborne's £3billion tax raid means that over-65s with incomes of between £10,500 and £28,000 a year will pay up to £323 a year extra in tax.

Dame Joan, 78, said: "It is fundamentally unfair that the Government is raiding pensioners' allowances at the same time as cutting tax for the richest one per cent. I'm asking people to join me and tell Cameron and Osborne to think again."

TAX CREDITS

GEORGE Osborne will hammer more than five-and-a-half million families with a £614 tax bombshell, shock figures reveal.

The Chancellor warned in his Budget that 5 million families he wanted to slash a further £10.5billion from the welfare bill by 2016.

It is predicted he will cut £3.5billion in tax credits and £6.5billion from other welfare payments.

The plan will mean around 5.7 million less well-off families losing an average £614 a year in tax credits, according to a detailed analysis of his Budget by Labour.

Shadow Work and Pensions Secretary Liam Byrne said: "Hidden in the fine print is nothing less than a £3.5billion tax bombshell for low-income families.